A short one here.
I run a small business here in the hinterlands of this great country and many years ago I had the opportunity to poke a Fortune 500 CEO in the eye, repeatedly.
To this day I can’t remember how or why I got his personal email and cell numbers but I did. It was likely some sort of a mistake that was made at a trade show or something. The net is that I had them.
I was a distributor for one of this company’s many lines. They made some completely awful decisions that had to do with the local market. I called the CEO several times and told him that these decisions needed to be reversed, immediately, or literally 100% of their sales would go away in my markets.
Of course this is exactly what happened, and with relish, I called the CEO after their sales in my markets went to the level of zero, previously predicted, and asked him to tell me that I was right and how smart I was. I also told him what a great job his competitors were doing since we had moved away to their products in a heartbeat when the disastrous strategy was rolled out. He shouted at me and I laughed at him and asked him again to tell me how right and smart I was. He hung up on me after using some bad words. I laughed my ass off.
Eventually he got tired of my nonsense and blocked me, but it was fun since he actually took my abuse so many times (even though my “abuse” was actually the boots on the ground truth). I started out polite and respectful, but when he acted like I was just some dopey hick from the sticks that didn’t know jack, well, I was forced to taunt him several times, as Monty Python used to say.
One time back in the 70s when I had been a practice only a couple of years, our telephone service went down one weekend. I forget the details all these years later but I called their service center and got nowhere. I kept asking for a supervisor as this was a real emergency. We had patients in ICU and needed to be able to take calls.
My wife was an ICU nurse and after we were married, she told me she could not believe how many times the telephone would ring at night when I was on call.
Anyway, and I forget why, I eventually got the CEO of PacBell on the phone. Our lines got fixed and somebody in the chain of command probably got reamed out for giving me his number.
Dan’s and Mike’s stories provide significant reason to choose free enterprise over a command economy. Free enterprise proves able to accomplish correction via competition.
Roy, it’s not a “command economy” vs. “free enterprise” thing. It’s an arrogance of authority issue.
You could make a command economy work, but you’d need a set of ant-like human beings with no damn ego whatsoever, and who could communicate clearly and cogently with each other when the situation dictated. Then, the entire chain of authority would have to react reasonably and responsibly, without fear of repercussion or anyone seeking to enhance their status.
You’d need saints and angels, everywhere.
In a free market, you just need to ensure that consequence flows freely, and that the idiots like that CEO don’t get a chance to form monopolies, and then the market takes care of that whole “saints and angels” thing, because consequence will flow back up onto the idiot doing the stupid.
Command economies just eliminate the feedback loop, and that’s what kills them dead, every time. If you do the same thing to a free market economy, by imposing monopoly, the same thing happens, and for the same reason: You’ve choked out the feedback loop.
There’s no particular virtue in either approach; the virtue lies where you’re honest with yourself and the rest of the participants in the economy with you. In command economies, everything invariably becomes wrapped around the egos of the ones in command, and because they can’t admit that they’re not gods among men or ever capable of being wrong, well… Yeah. You get what you get. Free markets aren’t any more virtuous, they’re just more impersonally better at letting information flow via the salutary effects of lost market shares and the money accruing therefrom.
The “command economy” example is the military but FDR had to get Bill Knudson and Ferdie Eberstad to untangle the mess when WWII began.
Both businessmen like Trump.
}}} You could make a command economy work, but you’d need a set of ant-like human beings with no damn ego whatsoever, and who could communicate clearly and cogently with each other when the situation dictated. Then, the entire chain of authority would have to react reasonably and responsibly, without fear of repercussion or anyone seeking to enhance their status.
No, you can’t. This, above, is the bleat of socialist fools everywhere, just put more mildly.
Not to cast aspersions, I don’t think you meant it that way, but you were channeling a Useful Idiot when you wrote it.
It’s not that a command economy does not work. Any classical corporation is a “command economy” in miniature.
It’s that command economies don’t SCALE. They work fine up to a certain size… but the larger things get, the more important information sits by the wayside, unused, stuck at some bottleneck, typically either an idiot (the clueless putz who does not see the info is important to certain people) or an egotist (“MINE!! MINE!!”).
The simple matter is, it fails to flow, and thus yet another inefficiency is added to the eventual avalanche of cascade failures that destroy a company… or a country.
I think this is one of the biggest problems with modern company design, in an IP & Services Economy… they are generally hierarchies, with their inherent information bottlenecks… And the proper design for companies in an IPSE is a network.
In an IPSE, the FLOW OF INFORMATION is what drives the engine of wealth creation. And hierarchies have inherent bottlenecks the larger they get.
The command model works for corporations up to a certain size. That size is 4 maybe 6 with probably about 500% turnover. There are two sorts of successful organizations: those that stay out of the way of the employees that are actually doing the work and those that don’t manage to get in the way. The first kind die as soon as the bizschool twerps with their minimax optimizations take over.
I’m sure that whatever company Dan was talking about had lots their own people that told the CEO the same things he did.
Look how well GE did post Welch. If you run a business like a mine, you have to expect that it disappears when whatever you are extracting runs out. It turns out that Welch was mining the 120 years of accomplishment that started with Edison. Now that it’s gone, so is the company.
Boeing is in it’s death throws. It’s days were numbered as soon as the management decided that the planes didn’t really matter and moved to Chicago. Of all the places they could have chosen, Chicago? No offense.
Boeing died when the idiots in charge decided to merge with MD. What resulted was more like a zombie movie, as the MD people worked their way into authority and then did the same thing to Boeing that they’d already done to MD.
Long-time Boeing employees I know saw the handwriting on the wall 20 years ago, when the merger happened. As they saw it, it wasn’t so much a merger as Boeing being taken over by a corporate Cordyceps fungal infection, and where we are now is the stage where the company has taken up residence up in the leafy overstory and is waiting for the fungus to start fruiting…
Boeing as we know it has been dead for a long, long time. The MD bean-counters and marketroids took it over, and have finally run it into the side of a mountain.
MBA-think has done more damage to American industry than anything I can think of. As Henry Ford supposedly said about his accountants, “…they know the price of everything, and the value of nothing…”.
That’s the way ALL these buyouts/mergers of near equals work. The buying/name company gets the figurehead top jobs, and the bought-out company gets the middle management jobs that actually make policy. I saw HP/Compaq from the inside…same thing.
FWIW, the Boeing/MD merger was midwife’d by Bill Clinton’s Deputy Secretary of Defense Bill Perry. See:
https://mattstoller.substack.com/p/the-coming-boeing-bailout
The MD bean-counters and marketroids took it over, and have finally run it into the side of a mountain.
This is what happened to Ford in the 60s. The lawyers and accountants took over from the engineers. The movie, “Ford Vs Ferrari” was about that. Iacocca saved the company.